Topics discussed this week include:

  • EPA issues important New Source Review guidance.
  • EPA announces decision not to issue final regulations for hardrock mining.
  • EPA reaches Clean Air Act settlement with outdoor products manufacturer.
  • Commission issues rules that would ban hydraulic fracturing within Delaware River Basin.
  • Federal court upholds lower court ruling that North Dakota lacks standing to intervene to challenge EPA settlement.
  • California Supreme Court decides that groundwater charges are neither taxes nor tied to property ownership.

EPA issues important New Source Review guidance. On Dec. 7, Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a guidance memo clarifying the agency’s interpretation of the Clean Air Act’s New Source Review (NSR) regulations, including outlining when and under what criteria EPA will consider the emission projections a source makes under the rules. Entitled “New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability,” the memo is part of EPA’s implementation of the President’s directive to streamline regulatory permitting requirements for manufacturing and other facilities. According to the guidance, EPA has determined to focus on the fact that it is the source’s obligation “to perform pre-project NSR applicability analyses and document and maintain records of such analyses.” As such, it is now EPA’s policy “that when a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, that owner or operator has met the pre-project source obligations of the regulations, unless there is clear error (e.g., the course applies the wrong significance threshold).” The EPA does not intend to substitute its judgement for that of the owner or operator by “second-guessing the owner or operator’s emissions projections.” Therefore, as long as the source followed the right process, EPA is not going to second-guess the result. Moreover, EPA emphasized that it would be looking at the arc of post-project data — and would not be initiating enforcement without a showing of post-project emissions increases.

EPA announces decision not to issue final regulations for hardrock mining. On Dec. 1, EPA announced its decision on its proposed regulations for financial responsibility requirements for the hardrock mining and mineral processing facilities. According to EPA, it decided not to issue final regulations because the agency determined that final regulations are not appropriate based on EPA’s interpretation of the statute and its analysis of its record developed for this rulemaking. In late 2016, the EPA had proposed to require hardrock mines — which extract hard metals such as gold, copper, iron and zinc — to obtain Superfund financial assurances to cover any necessary cleanup. EPA had issued the proposal in response to an order that had required EPA to decide whether to issue financial assurance regulations by Dec. 1, 2017. In re: Idaho Conservation League, et al. (D.C. Cir. Jan. 29, 2016). Environmental nongovernmental organizations have stated that they will likely challenge the agency’s decision.

EPA reaches Clean Air Act settlement with outdoor products manufacturer. Husqvarna, a Swedish company that makes outdoor power tools, has agreed to settle with EPA over allegations it overstated the emission reduction capabilities in certain engine models, according to a consent decree. United States v. Husqvarna AB, D.D.C., No. 1:17-cv-02597 (lodged Dec. 5, 2017) (D. D.C.). Husqvarna will pay more than $2.8 million in penalties to the U.S. for air pollution testing violations from its leaf blowers, trimmers and chainsaws. The fines apply to 1,235 model year 2012 engines, which are sources of nitrogen oxides and other air pollutants. According to the consent degree, Husqvarna has addressed its reporting problems and corrected how it describes the emissions from the engines.

Commission issues rules that would ban hydraulic fracturing within Delaware River Basin. On Nov. 30, the Delaware River Basin Commission issued draft regulations that would ban fracking in portions of Delaware, New Jersey, New York and Pennsylvania. The proposed regulations implementing the ban would prohibit high-volume hydraulic fracturing in shale and other rock formations in the 13,539-square-mile river basin and would govern the use, management and disposal of water from fracking operations. If implemented, the rules would make permanent a de facto moratorium on fracking in the basin that has been in place since 2010. The commission will hold four hearings at the end of January in Waymart, Pennsylvania, and in Philadelphia, and will accept written comments on its proposal through Feb. 28.

Federal court upholds lower court ruling that North Dakota lacks standing to intervene to challenge EPA settlement. The U.S. Court of Appeals for the District of Columbia Circuit issued an order in Environmental Integrity Project, et al. v. Pruitt, et al. rejecting North Dakota’s bid to intervene to oppose an EPA settlement. In 2015, the environmental groups had sued EPA in district court, alleging that EPA failed to undertake nondiscretionary statutory duties to periodically review and, if necessary, revise its Resource Conservation and Recovery Act (RCRA) solid waste rules for wastewater, drill cuttings, residual waste and drilling muds associated with oil and gas exploration and production. In a 2016 consent decree, EPA committed to determine whether to revise the RCRA subtitle D rules for oil and gas waste by March 15, 2019 and to finalize any updates the agency decides to develop by 2021. North Dakota sought to intervene in that proceeding to oppose the consent decree, but the district court denied the motion. North Dakota appealed, arguing that as a state it was entitled to “special solicitude” to challenge a settlement. The appeals court disagreed, holding that the possibility of potentially adverse regulation is not an injury that confers standing, even to a state. In so holding, the court reaffirmed its previous rulings that a stakeholder cannot challenge a settlement establishing a deadline for an agency to decide whether to promulgate a rule.

California Supreme Court decides that groundwater charges are neither taxes nor tied to property ownership. On Dec. 4, the California Supreme Court, in City of San Buenaventura v. United Water Conservation Dist., ruled that the charges that the City of Ventura pays to the United Water Conservation District (District) for groundwater conservation activities are neither taxes nor fees that require approval by property owners or vote. In California, water districts are responsible for managing, protecting, conserving and enhancing water resources in the most cost effective and environmentally balanced manner. In some groundwater basins, users often use more water than what is replaced by natural processes, including rainfall and river and stream flow. To address this, districts replenish groundwater supply by diverting water from other sources and spreading it over the ground covering certain basins within district boundaries. To reduce the demand for groundwater extraction, districts may also provide pipeline deliveries of water derived from other sources. These activities are financed by a “ground water charge.” The City of Ventura pumps large quantities of groundwater for delivery to residential customers and had been paying ground water charges to the District. Ventura had argued that the groundwater pumping charges it was paying to the water conservation district was disproportionate to the benefits it received from the District’s conservation activities. The California Constitution provides that a charge imposed as an incident of property ownership, including a charge for a property related service, may not exceed the proportional cost of the service that is attributable to the parcel on which the charge is imposed. The Constitution also provides that local government charges that are taxes generally must be approved by voters. Believing its payment was disproportionate and amounted to an unapproved tax, the City sued the District. Ruling for the District, the Supreme Court held that because the charges are not for property-related services, they do not require approval either by property owners or two-thirds of area voters. As these fees ultimately get included in the charges a property owner pays for water supply, this decision limits to some degree the ability of the municipal water supplier to set rates for water service and will have an effect on water users, both agricultural and residential.